Logistics Management Assessment - Essay Example

Logistics Management Assessment Student’s Name: Instructor’s Name: Course Code: Date of Submission: Table of contents Introduction 3 Chinese Sourcing Operations Supplier Selection, Evaluation and Procurement 4 International Transportation from China to Australia 6 Australian Customs, Quarantine and Inspection Clearance 7 Conclusion 9 ACCC 2011, Australian Quarantine and Inspection Service (AQIS), viewed 13 December 2011 http://www.accc.gov.au/content/index.phtml/itemId/829977/fromItemId/815972/quickLinkId/815426/whichType/org 12 Australian government 2010, People’s Republic of China country brief: Overview of Australia-China relations, viewed 13 December 2011 http://www.dfat.gov.au/geo/china/china_brief.html 12 Australian government 2011, Importing to Australia, viewed 13 December 2011 http://www.daff.gov.au/aqis/import 12 Introduction Logistics management is very essential in any business as it focuses on the product availability. Logistics in a business is responsible for the flow of various goods from one business to the other, flow of business information and other resources that are involved in the management of the supply chain. It is generally directed to the end point or the consumption point with more orientation to the consumer’s requirements that has been set up in the market. Logistics ranges from the business information and inventory, goods packaging to the security of goods and the business. At every point in a business, there is a need of a proper and controlled flow of products from the origin to the point of destination or to the consumer point. This calls for an effective management of the various logistics activities. This leads to meeting of the set consumer’s requirements with catering of the applicable legal requirements. This in turn will achieve the process of acquiring the right products and services at the right time to the right destination (Jones 2001). There has been advanced changes in the business field for the last decade. This has been contributed by introduction of online business that has enabled the consumers to obtain the products of their choice without physically engaging with the retailers. Internet has grown as a media for shopping throughout Australia and other parts of the world. Consumers has adapted to adhering to online space due to increased benefits such as low prices, wide range of products for selection, convenience, saving time and increased transparency. Due to the technological changes, online business has rapidly advanced since its introduction that has led to a drastic increase in the percentages of sales worldwide using internet (Bonney 1994). Use of online for importation of goods and services to the country of destination has led to reduction of production costs as the right products are shipped from the origin at the right time and place to the consumer point. Australia has been one of the leading importers of goods from China that includes computers, communications equipment, furniture, sporting goods and other types of electronics. Studies show that there has been an observed increase in percentage of imported goods from china (Australian government 2010). This essay discusses how sourcing operations, selection of supplier, evaluation and procurement in china contribute to low costs of products and add value to time and place utility. It also examines how the international transportation of products from china to Australia contributes to low costs of products and adds to time and place utility. Finally, it examines contribution of Australian quarantine, customs and inspection clearance to low cost of production and its addition to place and time utility. Chinese Sourcing Operations Supplier Selection, Evaluation and Procurement Sourcing is very critical in the organization focusing on supply chain management principles. It specializes with supply base management through identification and selection of the suppliers in order to maintain long-term partnership. This concerns the effective resource allocation in order to enhance the performance of the supplier through provision of feedback and benchmarks to the suppliers. For any retailer to make sure that the consumers gets the best products according to the specifications, the products and services are obtained from different areas (Talluri & Narasimhan 2004). China is very effective in identifying quality control features on their products and in addition, there is availability of functional strategies concerning the delivery of products at each stage. This affirms that there are minimal disputes on any sourced product from various purchasers. This has been made possible through selection of agents to address different features related to sourcing. In order to ensure outsourcing of products at each stage, business parties are incorporated in order to make sure they are represented by a particular body. Through implementation of the policies for quality control, there is an effective process of producing, advertising and marketing of products that are ready for use by the consumer. The flow of this process focuses on the retailer in such a way that the guidelines applied on quality control will urge the retailer to come for more products that is reflected by increased profits (Handfield 1994). After one identifies the preferred products, there is a beginning of another stage for products inspection. The process flows systematically and it involves counterchecking the quality of goods, auditing which comes in hand with the factory audit and the underpinning documents. Then a certificate is provided and it depicts the purchased products’ quantity, quality and design. The process of sourcing gives the retailer confidence on the quality of his or her goods. This on the other hand increases the amount of sales of goods and services (Bozarth et al. 1998). Supplier selection follows an approved sourcing and involves identification and selection of supplier. Through this process, the firm is ready to spend financially with an aim of gaining significant benefits after contracting with the supplier. The steps involved in selection of the supplier are based on the supplier’s variety of previous activities in this field. The systematic process is followed and it involves supplier identification, information soliciting from supplier, setting terms of contracts and negotiating with the supplier (Beil & Ross 2009). After identification, the information is acquired based on previous supplying records in order come up with a concrete decision. This information relates to the quality of supplied goods, the supplier reliability and the previous records on supplying. A successful information in soliciting of the suppliers leads to the stage on the setting of the contract terms that involve preparation of the contract with all the conditions laid down in the process of supply. Negotiation step follows where both parties induce the terms that are favorable to them (McAfee & McMillan 1986). In the evaluation of the supplier, the retailer is very much concerned with the price, delivery and quality that are the main dimensions of evaluation. Additional dimensions involved include technical capabilities, flexibility, support, production capacity, innovations and financial status. This can be said to focus specifically on the effectiveness and reliability of the supplier. By observing the efficiency on quality, price and delivery of products and services, there is possibility of procuring at this stage. After the retailers measure and define what is of best value to their consumers, they are able to execute decisions on procurement. Through procurement, the retailers are provided with the goods and services according to their specifications that are based on the consumers demand. This ensures that there is total satisfaction of goods and services according to the client’s specifications (Ghawai & Scheider 2004). International Transportation from China to Australia After the retailer is satisfied with the products, he or she buys goods. This starts another process of transferring them from China to Australia. Transportation ensures that these goods are destined to the customers according to their specifications. The commons modes of transportation of goods and services from china to Australia are water and air that depends on the nature of the products such as bulky or perishable products. The transfer of the goods and services involves clearing at the Chinese ports and at the Australian ports. Australia incorporates various channels for inspection of products before they get on the other side of the port. To ensure that the amount of goods transferred from one region to the other is quantified, Australia employs a transportation system that makes it easier to value each product arriving. Clearance and valuing of goods from China allows transportation to the specific retailers’ specifications. Once the goods arrive in Australian ports, several procedures are involved before allowing them to proceed to the next stage of transportation. The process involved in the port is specifically done through documenting in order to ensure that all legal procedures are adhered to before exit. These procedures include customs duties and taxing which are essential in determining the economic trends on imports that are important in determination of the country’s gross domestic products (GDP). In addition, this ensures that safety of the products as specified by the consumer is maintained (Frazier 1999). Australian Customs, Quarantine and Inspection Clearance Logistics management in quarantine customs and inspection clearance in Australia is achieved through the government bodies such as Border Protection and Customs Service and the Australian Quarantine Inspection Service. These bodies are meant for clearing import and export products. Border protection and customs service has the mandate of protecting the boarder by ensuring that there is legal transportation of goods and also taxes and duties required are collected (Australian government, 2011). The Quarantine Inspection Service (QIS) is also regarded as first line Australian defense and is responsible of reducing risks associated with environment and agricultural industries. It is also located at the boarders of Australia to eliminate any risk related to exotic diseases and pests (ACCC 2011). Transportation of goods to Australian ports is done under section 77G of licensed facility. This shipment includes all household goods, personal effects and any other facility accompanied such as motor vehicles, trailers, boats and caravans. Upon receiving these goods at the port, the goods are inspected by the customs and quarantine inspection bodies (Thomas & Griffin 1996). QIS is classifies goods into various types which include agricultural products, biological products, vessels, food, live animals and reproductive materials, household goods or personal effects, plants products, motor vehicles and machinery. The bearer of the goods is also required to provide detailed information about him/her. The AQIS unit on biological products usually administers the biological products importation quarantine. The products under inspection include laboratory materials, vaccines and products derived from animal and microbial products. The unit on reproductive materials and live animals inspects animals because they greatly consider controlling of any risk that may be related to importation of the animals. The unit prohibits importation of any other animal except birds, cats, dogs, horses and rabbits. The unit on plants products inspects any commodity such as pet food, dried vegetables and fruit products, spices and herbs, white rice and stock feed. These products are considered to pose a major risk on Australian food, environment, economy and security. Unit on wood products inspects furniture, wood material, picture frames or sawn timber. Motor vehicles and machinery unit involves the motor cycles, trailers, boats, motor vehicles and caravans (Australian government 2011). The motor vehicles and machinery must be identified first. To prove ownership, value and period of ownership, one must provide the supporting documents and in addition, they must be accompanied by separate import permit. The unit on livestock and agricultural industries ensures that they are all safe before delivery to the consumers. This ensures that Australia remain a country that is free from animal or crop diseases and pests. The ultimate responsibility of AQIS has been protection of Australian natural and economic assets from risks associated with health. This is achieved while the international movement of products, services and people is facilitated. The efficiency behind these bodies is that clearance of any product is only done if it has gone through the inspection tests (Krumwiede & Sheu 2002). The boarder protection and custom services in Australia have the mandate of facilitating movement of people and trade across the borders of Australia through observation of the following conditions; efficient customs revenue collection, administration of measures on trade and assistance on specific industrial schemes. The body also ensures that the country has achieved its responsibilities on border protection. This body is very essential to the country as its functions are aimed at increasing the country’s economy on retail industry. In addition, the consumers will be able to access the best quality products at the time and place (ACCC 2011). Conclusion Activities on the logistics management include the entire process of performing business right from the origin of the product or services to the consumer point. This includes management of inbound and outbound transportation, management of fleet, warehousing, fulfillment of the order, design of logistic network, management of inventory, planning demand or supply and managing logistic services provided by third parties. It also includes sourcing, procurement, planning and scheduling of production assembly and packaging. It acts as an integrating function where various logistic activities are coordinated to transfer the right product and services to the consumer at the right time and place. Advancement in the business field has led to rapid growth of online retail that is gradually replacing the traditional retailing. Retailers buy goods according to the specification of the consumers such as their quality, quantity and price. This is then transferred to the operations between the retailers and suppliers. Since the retailers represents the consumers, considering their expectations means more sales and increased profits to the suppliers and retailers and satisfaction to the consumers. Consumers have been so much directed to online retailing due to increased benefits such as low prices, wide range of products for making selection, convenience and transparency. With increased online business, Australia is working on its international business to make sure its consumers obtain the right product and at the right time and place while also addressing its economy matters on the retail industry. This has been achieved by effective operation of bodies governing the importation and exportation of goods and services. These bodies include the Australian Border and Custom Services that deal with tax collection, custom charges and other duties on passing goods into and out of Australia. The other body is the Australian Quarantine and Inspection Service (AQIS) that deals with the inspection of any product passing through Australian ports to ensure health and safety of the consumers. References ACCC 2011, Australian Quarantine and Inspection Service (AQIS), viewed 13 December 2011 http://www.accc.gov.au/content/index.phtml/itemId/829977/fromItemId/815972/quickLinkId/815426/whichType/org Australian government 2010, People’s Republic of China country brief: Overview of Australia-China relations, viewed 13 December 2011 http://www.dfat.gov.au/geo/china/china_brief.html Australian government 2011, Importing to Australia, viewed 13 December 2011 http://www.daff.gov.au/aqis/import Bozarth, C., Handfield, R. B. & Das, S. K. 1998, 'Stages of Global Sourcing Strategy Evolution: An Exploratory Study.' Journal of Operations Management, vol. 16, no.1, Pp. 241-255. Bonney, J 1994, ‘Supply chain management: treat it like a product’, American Shipper, vol. 36, no. 2, pp. 39-43. 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